Byco mulls $1bln investment in fluid catalytic cracking plant

KARACHI: Byco Petroleum is considering an investment in a Fluid Catalytic Cracking (FCC) plant that will allow for a greater proportion of Motor Spirit (MS) to be produced during the refining process, while also allowing petrochemical products refining, the company management told an analyst briefing.

“The management believes that setting up such a plant with a capacity of 50,000 barrels/day generally costs about $1 billion, according to available literature, and would take up to five years to install,” an analyst at JS Global Capital noted in a report.

Oil Companies Advisory Council (OCAC), which constitutes all of the oil refiners and downstream oil marketing companies, estimates that demand for petroleum products will rise at a robust rate of 10 percent/annum for the next five years.

“Byco intends to leverage its capabilities to capitalise on this extremely healthy prospect for the oil sector by expanding its core refining as well as other operations,” an official said.

Pakistan’s petroleum products demand is expected to continue growing well into the future, climbing to 50 million tons by 2030, due to the impact of the China-Pakistan Economic Corridor (CPEC) which is investing nearly $60 billion in Pakistan’s infrastructure, including roads, rail, and power network.

Byco Petroleum had reported a Q3FY19 consolidated net profit of Rs478 million (EPS: Rs0.09) down 49 percent from the same period last year. The company operates two refineries in Mouza Kund in Hub, Balochistan totalling a design capacity of 155,000 barrels of crude oil per day, more than any other refining complex in the country. Byco has Pakistan’s largest crude oil storage capacity as well.

Byco is the only refinery which converts 100 percent of Naptha in to motor spirit (MS) due to Isomerization plant and Catalytic reformer, which converts heavy Naphta into MS. BYCO refines the highest quality of MS in the country (92 RON).

According to a company publication, Byco has planned to deploy additional single point mooring (SPMs) in the future. “In the long run, Byco could even turn this into a source of revenues by providing crude oil and refined products imports and export services to other oil refiners and oil marketing companies.”

Moreover, the company is also leveraging its strength in the downstream space by focusing on growing its liquid petroleum gas (LPG) and petroleum lubricants sales. It has been actively working to make its LPG - which comes in its own branded cylinders - available in all of its retail outlets and other locations.

Byco has a network of 361 retail outlets across Pakistan, the majority being in Punjab, while the management plans to increase its retail presence and is currently awaiting regulatory approvals for the same.